Sunday 24 Nov
Natural gas prices in Europe have risen, in light of indications of increased competition with Egypt to purchase fuel shipments.
Egypt's gas purchases have raised
concerns among traders about Europe's supply balance, as rising demand in other
parts of the world could reduce the amount of fuel reaching the region. Although
the region currently has ample supplies, it relies on continuous flows from
around the globe, especially after Russia curtailed pipeline supplies to the
region in 2022.
Benchmark futures contracts rose
by up to 2.5% on Friday, following a higher close the previous day. Egypt is
seeking to purchase 20 liquefied natural gas cargoes starting in October,
marking the first time in years that the country has sought to import gas ahead
of winter.
Egypt aims to buy 20 liquefied
natural gas (LNG) cargoes starting in
October, marking the first time in years that the country will import the fuel
before winter.
Florence Schmitt, European energy
markets analyst at Rabobank, said in a note this week: "European gas
prices will move during the winter based on demand growth. If a colder-than-expected
winter occurs in Europe, it could put upward pressure on prices.
European gas traders are
competing for longer-term contracts amid expectations of sustained high demand
for the fuel through the 2030s, even as the continent transitions to renewable
energy.
While Europe's large gas storage
has helped alleviate some supply concerns, traders are closely monitoring gas
flows and production disruptions outside the region. Temperatures are expected
to drop in parts of northwest Europe next week, which could boost demand.
The nearest-month futures contract in Europe, seen as a key benchmark for the continent's markets, rose 2.1% to 36.95 euros per megawatt-hour at 8:48 a.m. in Amsterdam.
